MTY Food Quarterly Profit Falls With Currency Hit, Sales Held Back by Winter Weather

MTY.TO

By Robb M. Stewart

MTY Food's earnings fell sharply in the latest quarter as the Canadian company faced delays in openings and unseasonably harsh winter weather in parts of North America.

The operator and franchisor of casual dining and fast-food chains including Country Style, Mr. Sub and Thai Express said it was preparing for headwinds brought on by global trade tensions and the Trump administration's heavy use of tariffs but had seen an improvement in traffic this quarter and anticipated picking up the pace of openings.

MTY Food logged first-quarter income of just 1.7 million Canadian dollars ($1.2 million), or C$0.07 a share, compared with C$17.3 million, or C$0.71 a share, in the same period a year earlier. The drop included foreign exchange losses of C$21.5 million due largely to intercompany loans.

Adjusted earnings before interest, tax, depreciation and amortization rose slightly to C$60.2 million for the three months ended Feb. 28, from C$59.5 million the year before, and in line with the mean of analysts forecasts compiled by FactSet.

Revenue for the quarter was up 2.2% at C$284.8 million, beating the C$275.6 million penciled in by analysts.

The Montreal-based company said its comparable same-store sales fell 1.5% year-over-year, with a 0.4% decline in Canada, a 2.2% in the U.S. and 3.5% decline for its international arm. MTY's network opened 70 locations during the first quarter and closed 102 others, and by the end of the three-month period the company had 7,047 locations in operation.

Same-store sales faced pressure from extreme weather conditions, particularly in the U.S., though the company said the fiscal second quarter was off to a better start with traffic trends improved across regions. It said it was prepared for potential headwinds as consumers adjust to the impacts of recently announced tariffs though in both Canada and the U.S. MTY primarily sources products domestically which helps limit potential exposure.

MTY said its management anticipates an improvement in the pace of openings in the second and third quarters, supported by favorable seasonal trends and continued strong demand for the company's brands.

Write to Robb M. Stewart at [email protected]

(END) Dow Jones Newswires

04-11-25 0745ET